What Is The Difference Between At & T And Fast Oligopoly
Team G3 reviewed the degree of market concentration in the wireless industry of the U.S. from 2011 to 2015. Based on the information provided, we determined that the wireless industry is dominated mainly by four corporations Verizon, AT&T, Sprint and T-Mobile which account for a large majority of the market share. With so few wireless carriers competing, the market is considered a tight oligopoly. As recommended in the provided article from “The Economist”, team G3 agrees with the author that further consolidation of the wireless market wouldn’t provide a more competitive market structure. If the merger of AT&T and T-Mobile were allowed it would result in a newly formed AT&T with nearly a 50% share of the market. The merger would then push the wireless industry into a duopoly between AT&T and Verizon, which would have about 80% of the market between them. The influence of smaller firms like US Cellular and Sprint would continue to diminish and the possibility of a new entrant to the wireless marketplace would be exceedingly more difficult. …show more content…
The merger would give AT&T unbalanced power in the marketplace allowing them to inflate prices, reduce innovation, and ultimately hold customers’ hostage even if they have poor service because of the lack of competition in the industry. These are all strong reasons why the merger should not be allowed.
Table 1 below contains the market concentration in the last quarter of 2015 that we will reference for calculations in the next couple of
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